Economy

Euro, Stocks Dive As Cyprus Bank Run Follows Bailout Levy

REUTERS, BLOOMBERG

Worldcrunch

NICOSIA – Global markets tumbled Monday as new doubts spread about the solvency of the eurozone with the Cypriot government preparing to impose a new levy on bank deposits in order to qualify for bailout funds.

Finance ministers in the eurozone Sunday had demanded that Cypriots pay up to 10% of their bank deposits in exchange for 10 billion euro bailout package. Panicked residents of the Mediterranean island nation began withdrawing their money from their accounts to avoid being hit by the levy, which would take effect this week.

The latest events have shaken investors, who fear such a bank run could be repeated in other troubled European economies. Shares fell in both Asia and Europe as the trading week opened, while the euro plunged nearly two percent at its lowest moment Monday.

“Traders and investors are aghast as these measures,” said chief market strategist at CMC Markers in Sydney, Michael McCarthy to Bloomberg Television.

Photo by - Leonid Mamchenkov

The Cypriot government is reportedly working on a levy reduction from 6.7% to 3% for deposits under 100,000 euros. Anything above this amount would be taxed between 9.9% to 12.5%, according to a Reuters source close to the consultations.

With many Russian-controlled bank accounts on the island, Russian President Vladimir Putin called the levy “unjust, unprofessional and dangerous,” reports Reuters.

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Preparing a COVID-19 vaccine booster in Huzhou, China.

Hannah Steinkopf-Frank, Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Ciao!*

Welcome to Wednesday, where Brazil's senate backs "crimes against humanity" charges against Jair Bolsonaro, the UN has a grim new climate report and Dune gets a sequel. Meanwhile, German daily Die Welt explores "Xi Jinping Thought," which is now being made part of Chinese schools' curriculum.

[*Italian]

🌎  7 THINGS TO KNOW RIGHT NOW

• Senators back Bolsonaro criminal charges: A Brazilian Senate panel has backed a report that supports charging President Jair Bolsonaro with crimes against humanity, for his alleged responsibility in the country's 600,000-plus COVID-19 deaths.

• Gas crisis in Moldova following Russian retaliation: Moldova, one of Europe's poorest countries, has for the first time challenged Russia's Gazprom following a price increase and failed contract negotiations, purchasing instead from Poland. In response, Russia has threatened to halt sales to the Eastern European country, which has previously acquired all of its gas from Gazprom.

• New UN climate report finds planned emission cuts fall short: The Emissions Gap Report 2021 concludes that country pledges to reduce greenhouse gas emissions aren't large enough to keep the global temperature rise below 1.5 °C degrees this century. The UN Environment Program predicts a 2.7 °C increase, with significant environmental impacts, but there is still hope that longer term net-zero goals will curtail some temperature rise.

• COVID update: As part of its long-awaited reopening, Australia will officially allow its citizens to travel abroad without a government waiver for the first time in more than 18 months. Bulgaria, meanwhile, hits record daily high COVID-19 cases as the Eastern European's hotel and restaurant association is planning protests over the implementation of the vaccination "green pass." In the U.S., a panel of government medical advisors backed the use of Pfizer COVID-19 vaccine for five to 11-year-olds.

• U.S. appeals decision to block Julian Assange extradition: The United States said it was "extremely disappointed" in a UK judge's ruling that Assange, the founder of Wikileaks, would be a suicide risk of he traveled across the Atlantic. In the U.S., he faces 18 charges related to the 2010 release of 500,000 secret files related to U.S. military activity.

• Deposed Sudan prime minister released: Prime Minister Abdalla Hamdok has been released from custody, though remains under heavy guard after Sudan's military coup. Protests against the coup have continued in the capital Khartoum, as Hamdok has called for the release of other detained governmental officials.

Dune Part 2 confirmed: The world will get to see Timothée Chalamet ride a sandworm: The second installment of the sci-fi epic and global box office hit has officially been greenlit, set to hit the screens in 2023.

🗞️  FRONT PAGE

Front page of the National Post's October 27 front page

Canadian daily National Post reports on the nomination of Steven Guilbeault, a former Greenpeace activist, as the country's new Environment minister. He had been arrested in 2001 for scaling Toronto's CN Tower to unfurl a banner for Greenpeace, which he left in 2008.

📰  STORY OF THE DAY

Chinese students now required to learn to think like Xi Jinping

"Xi Jinping Thought" ideas on socialism have been spreading across the country since 2017. But now, Beijing is going one step further by making them part of the curriculum, from the elementary level all the way up to university, reports Maximilian Kalkhof in German daily Die Welt.

🇨🇳 It's important to strengthen the "determination to listen to and follow the party." Also, teaching materials should "cultivate patriotic feelings." So say the new guidelines issued by the Chinese Ministry of Education. The goal is to help Chinese students develop more "Marxist beliefs," and for that, the government wants its national curriculum to include "Xi Jinping Thought," the ideas, namely, of China's current leader. Behind this word jam is a plan to consolidate the power of the nation, the party and Xi himself.

📚 Starting in September, the country's 300 million students have had to study the doctrine, from elementary school into university. And in some cities, even that doesn't seem to be enough. Shanghai announced that its students from third to fifth grade would only take final exams in mathematics and Chinese, de facto deleting English as an examination subject. Beijing, in the meantime, announced that it would ban the use of unauthorized foreign textbooks in elementary and middle schools.

⚠️ But how does a country that enchants its youth with socialist ideology and personality cults rise to become a world power? Isn't giving up English as a global language the quickest way into isolation? The educational reform comes at a time when Beijing is brutally disciplining many areas of public life, from tech giants to the entertainment industry. It has made it difficult for Chinese technology companies to go public abroad, and some media have reported that a blanket ban on IPOs in the United States is on the cards in the next few years.

➡️ Read more on Worldcrunch.com

📣 VERBATIM

"I'm a footballer and I'm gay."

— Australian soccer player Josh Cavallo said in a video accompanying a tweet in which he revealed his homosexuality, becoming the first top-flight male professional player in the world to do so. The 21-year-old said he was tired of living "this double life" and hoped his decision to come out would help other "players living in silence."

🇸🇩💥  IN OTHER NEWS

Why this Sudan coup d'état is different

Three days since the military coup was set in motion in Sudan, the situation on the ground continues to be fluid. Reuters reports this morning that workers at the state petroleum company Sudapet are joining a nationwide civil disobedience movement called by trade unions in response to the generals' overthrow of the government. Doctors have also announced a strike.

Generals in suits At the same time, the military appears firmly in control, with deposed Prime Minister Abdalla Hamdok allowed to return home today after being held by the coup leaders. How did we get here? That's the question that David E. Kiwuwa, a professor of international relations at the University of Nottingham, takes on in The Conversation:

"Since the revolution that deposed Omar el-Bashir in 2019, the military have fancied themselves as generals in suits. They have continued to wield enough power to almost run a parallel government in tension with the prime minister. This was evident when the military continued to have the say on security and foreign affairs.

Economy as alibi For their part, civilian officials concentrated on rejuvenating the economy and mobilizing international support for the transitional council. This didn't stop the military from accusing the civilian leadership of failing to resuscitate the country's ailing economy.

True, the economy has continued to struggle from high inflation, low industrial output and dwindling foreign direct investment. As in all economies, conditions have been exacerbated by the effects of COVID-19. Sudan's weakened economy is, however, not sufficient reason for the military intervention. Clearly this is merely an excuse."

➡️ Read more on Worldcrunch.com

#️⃣  BY THE NUMBERS

471 million euros

Rome's Casino di Villa Boncompagni Ludovisi, better known as Villa Aurora, will be put up for auction in January for 471 million euros ($547 million). The over-the-top price tag is thanks to the villa having the only known ceiling painting by Renaissance master Caravaggio.

✍️ Newsletter by Hannah Steinkopf-Frank, Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Who wants to start the bidding on the Caravaggio villa? Otherwise, let us know what the news looks like from your corner of the world! info@worldcrunch.com!

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